Market Analytics and Considerations
Key Notes
- While still in a downward trend channel, USD/JPY is encountering resistance.
- Today’s breakout of the EUR/JPY from a trend line may be followed by challenges.
TECHNICAL ANALYSIS OF USD/JPY
On the day that the Bank of Japan interfered for the second time to stop the Yen from weakening, USD/JPY reached a 32-year peak of 151.95 in October. The price has been trading in a trend channel that is declining since that apex.
At the beginning of the month, the price hit a 4-month bottom of 133.63, which was above the lower range of the descending trend channel.
The price is currently getting close to the channel’s top end, but it is finding it difficult to climb beyond recent peaks at 137.67 and 137.86.
The sinking line might be tested if there is a clean break above these levels, and moving above it might mean the bearish trend is stalling or even coming to a stop. The previous peaks and breakpoints of 139.90, 142.25, 143.53, and 145.11 may provide resistance further upward.
The 200-day Simple Moving Average or the most current dip of 133.63 can provide support (SMA). The market repelled the most recent decline below the 200-day SMA.
At 131.74, 131.50, 131.35, 131.25, and 130.40, a group of prior low points and breakpoints that may act as support are located.
The 260-day SMA and the lower boundary of the declining trend channel, which are close by, may have additional significance for 130.40.
Analysis – OF EUR/JPY
EUR/JPY has since risen from a two – month bottom of 140.77, which was just slightly lower than the prior low of 140.90. These levels might offer assistance.
Additionally, the downward movement was unable to cross an ascending trend line, which is presently crossing at 141.65 and may also act as support. Support may be found further downward at the prior low points of 137.37, 134.95, and 133.40.
The EUR/JPY pair has broken beyond a declining trend line as it has recovered to higher levels. Such a split has occasionally seen bullish carry through this year as well. Though it should be mentioned that past outcomes do not guarantee future ones.
